20 February 2018

Capacity and Wills: The Common Law still applies!

The legal test for mental capacity was brought into question in the recent High Court case of James v James & Orr [2018] EWHC 43 (Ch). Mr James sought to dispute the validity of his late father’s will, which left his entire estate to his two daughters and his wife.

Mr James worked in his father’s haulage business but the family also owned farmland. Mr James believed that his father had promised him that he would inherit the farm land. Mr James’ first claim for proprietary estoppel was unsuccessful, and so he sought to argue that his father’s will was invalid because he had lacked capacity to make it in the first place.

HHJ Matthews considered the traditional test for mental capacity established in the case of Banks v Goodfellow in 1870. Under this test, the testator must understand “the nature of his act and its effects, the extent of the property of which he is disposing.” He shall also “be able to comprehend and appreciate the claims to which he ought to give effect,” “no disorder of the mind shall poison his affections, avert his sense of right, or prevent the exercise of his natural faculties” and “no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if his mind had been sound, would not have been made.“

The Mental Capacity Act 2005 (the “MCA”) introduced a different test. The MCA provides that a person lacks capacity if at the material time he is “unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain”,whether this is permanent or temporary. The MCA goes on to state that a person is unable to make a decision for himself if he is “unable to understand the information relevant to the decision, to retain that information, to use or weigh that information as part of the process of making the decision, or to communicate his decision”.

HHJ Matthews considered and applied the case of Walker v Badmin [2014] to decide which test to apply. It was held that the MCA test did not apply when assessing a testator’s retrospective capacity to make a will. The definition of incapacity in the MCA applied for the purposes of the Act itself, (i.e. to determine the circumstances in which living persons are able to take decisions). Accordingly HHJ Matthews agreed that the common law test from Banks v Goodfellow should continue to be applied. He said that the same test cannot be used to decide (i) if a living person has capacity to make a will, and (ii) to decide if a retrospective will by a testator was valid. They are very different circumstances. HHJ Matthews also highlighted that the threshold for testamentary capacity has traditionally been low to ensure the elderly are not deprived of the ability to make wills in their old age.

After applying the facts, HHJ Matthews found that the testator satisfied the Banks v Goodfellow test and accordingly dismissed Mr James’ claim that his father’s will was invalid. It was held that whilst the testator had suffered some short term memory loss he “sufficiently appreciated the nature of the estate of which he was to dispose”.